An insurance and banking dispute with regard to the benefit of a letter of credit had been settled between the companies, but the parties then disagreed as to the meaning of the settlement.
Held: Counsel for Sirius ‘accepted that the second condition of the 3 September 1999 agreement was not and is not fulfilled. He accepted that the first condition was not fulfilled before the Tomlin order. He accepted that the literal words of paragraph 1 do not express an agreement by FAI that Sirius should pay Agnew’s claim. Creative construction or implication is required to interpret it as doing so. He accepted, I think, that an award in contested arbitration proceedings would not have fulfilled the first condition. But the Tomlin order, he said, embodied an agreement not an award, and the agreement that Sirius should be entitled to prove in FAI’s liquidation or administration for US$22.5m necessarily carried with it an agreement by FAI that Sirius should pay Agnew’s claim. I do not think so.’ FAI were entitled to the proceeds of the letter of credit in the escrow account. The effect was Sirius became an unsecured creditor in the insolvency of FAI
Judges:
May LJ Carnwath LJ
Citations:
[2003] EWCA Civ 470, [2003] 1 WLR 2214
Links:
Jurisdiction:
England and Wales
Citing:
Appeal from – Sirius International Insurance Co (Publ) v FAI General Insurance Ltd ChD 23-Jul-2002
The beneficiary sought to claim under a letter of credit. The bank resisted saying that the conditions in a letter accompanying the letter of credit had not been satisfied.
Held: The conditions set out in the letter of credit were satisfied . .
Cited by:
Appeal from – Sirius International Insurance Company (Publ) v FAI General Insurance Limited and others HL 2-Dec-2004
The appellant had taken certain insurance risks on behalf of the respondents, subject to banking indemnities. Disputes arose and were settled under a Tomlin order, which was now itself subject to challenge.
Held: The appeal was allowed. The . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 20 November 2022; Ref: scu.180746